Venezuelans hunt luxury overseas homes to flee Chavez socialism

Tom Bill

5 Min Read

LONDON (Reuters) - The number of Venezuelans hunting for luxury homes around the world jumped by a greater degree than any country last year as political uncertainty escalated in the South American state, a report from property consultant Knight Frank shows.

Venezuela's President and presidential candidate Hugo Chavez speaks in the rain during his closing campaign rally in Caracas in this October 4, 2012 file photo. REUTERS/Jorge Silva/Files

The 123-percent increase of searches from Venezuela was ahead of Brazil in second place with an 81-percent increase, according to the company’s Wealth Report, which for the first time tracked users of its website, where homes can cost up to 100 million pounds ($150.7 million).

Knight Frank has 1.2 million visits to its website each month and the share of traffic from South America grew by 178 percent between 2011 and 2012 though the region still represents less than 10 percent of the total, the company said.

Venezuela’s socialist president, Hugo Chavez, died from cancer on Tuesday after a 14-year reign that polarized his nation. While he was adored by many of the poor for his humble roots, earthy rhetoric and oil-financed welfare policies, he was a hate-figure for opponents who viewed him as a dictatorial leader who stamped on opponents and ruined the economy, prompting thousands to leave the country.

“The statistics are no surprise at all,” Diego Moya-Ocampos, a Venezuela political risk analyst at IHS Global-Insight, said before Chavez’s death. “Venezuelans perceive there will be more of the same after Chavez as polls indicate vice president Nicolas Maduro will be his successor.”

“The other reason is the country is now the single most murderous in South America and the kidnap rate is high,” he said, naming Miami, the Dominican Republic and Spanish

“Our experience is that whenever we see a spike in web traffic, then actual sales follow with a three to six month lag,” said Liam Bailey, head of residential research at Knight Frank.

“Venezuelans are showing strong interest in Madrid, and the Brazilians in the U.S. We’d expect a noticeable uptick in sales in 2013 from South America,” he said.

Some 40.4 percent of Venezuelans were Internet users in 2011, up from 37.6 percent in 2010, according to World Bank data, a smaller percentage point jump than that in Argentina, Brazil, Britain or the United States.

South America saw the biggest jump in web traffic by region as fast-growing consumer markets and natural resource wealth has boosted fortunes throughout the area in recent years.

WEALTHY SEEK REAL ESTATE HAVENS

Forbes recently estimated that Brazil has minted 19 new millionaires per day since 2007 and the number of Brazilians on its 2013 billionaires list grew by more than 25 percent.

Concerns about inflation and local currencies have also encouraged elites in Brazil and Argentina to invest in foreign real estate.

“One of the biggest trends in the past 12 months has been the growth of Latin American wealth moving into global property assets,” Bailey said. “Brazilian wealth leads with significant money being invested in Miami and New York.”

In one of London’s biggest property deals last year, Brazilian billionaire Moise Yacoub Safra paid about 500 million pounds ($756 million) for the Plantation Place office building in the British capital’s financial district.

Elsewhere, political uncertainty in north Africa and the Middle East drove money into Dubai and pushed up prices for the best homes by 20 percent, helping the emirate recover from a property crash that struck at the end of 2008.

The jump placed it third on a list of global price rises for high-end homes headed by Jakarta (38 percent) and Bali (20 percent) in Indonesia, a country experiencing a commodities-driven wealth boom.

The list accounts for the top five percent of homes by value in most of the housing markets tracked, Knight Frank said.

“Arab Spring money led the way in Dubai,” said Helen Tatham, a director or residential at Knight Frank in Dubai. “Money has flowed in from Afghanistan, Syria, Egypt and Bahrain.”

Monaco retained its crown as the most expensive place per square foot to buy a home, followed by Hong Kong and London. Buyers would get more than five times as much floor space for the same money in Mumbai, India, as Monaco and more than 10 times more in Cape Town, South Africa.